Government urges Social Security, SSI recipients to 'Go Direct'

Posted: Friday, October 22, 2004

NEW YORK (AP) Uncle Sam wants you to ''Go Direct.''

No, this isn't an appeal for military recruits. It's a new campaign by the government to encourage people who receive Social Security and other government benefit checks to have their money deposited directly into their bank or credit union accounts.

''We're trying to get across especially to the elderly and the disabled that direct deposit is safer, easier and faster'' than dealing with mailed checks, said Don Hammond, fiscal assistant secretary for the U.S. Treasury.

While direct deposit has gained wide acceptance in the private sector over the past two decades, it's been slower to catch on in the public sector.

According to the latest figures from the Social Security Administration, some 82 percent of retirees have their checks deposited directly into their accounts, while 18 percent still receive paper checks. When it comes to the Supplemental Security Income program, or SSI, direct deposit participation is just 55 percent.

The Treasury estimates it could save up to $100 million a year if more people agree to direct deposit. That's because it costs the government 74.5 cents to write, process and deliver a check for a government benefit compared with 12.6 cents for a direct deposit.

The potential cost savings could be even greater over time because the nation's 76 million baby boomers are nearing retirement age, and the more who sign up for direct deposit the lower the government and taxpayer costs.

The ''Go Direct'' campaign will start with pilot programs in 10 markets, with the Treasury teaming with the Federal Reserve and community groups to educate the public about direct deposit.

Pilot program areas include the counties around Chicago and Springfield, Ill.; Knoxville, Memphis and Nashville in Tennessee; Austin, Dallas, Houston and San Antonio in Texas; and all of Puerto Rico.

If successful, the campaign will go nationwide in about six months.

Hammond acknowledges that persuading Social Security and SSI beneficiaries to give up their paper checks isn't always easy.

''Our research has found that some people find a check, in a strange way, to be more secure from their standpoint because it's something they can touch,'' he said. ''So we fully recognize the challenges related to this.''

In fact, a survey conducted by the Wirthlin Worldwide consulting firm of Reston, Va., for the Treasury found checks are central to some people's lives.

''For many respondents, receipt of their benefit check reminds them to pay their bills, balance their checkbooks or go to the bank,'' the study found. ''It's an integral part of their routine.''

The study also determined that some of those receiving benefit checks don't have bank or credit union accounts, although many go to banks and credit unions to cash their checks.

Michael Herd, spokesman for NACHA-The Electronic Payments Association trade group based in Herndon, Va., said the government needs to emphasize the advantages of direct deposit.

''Convenience is a big factor,'' Herd said.

With paper, he noted, the recipient has to wait until the check arrives in the mail, then make a trip to the bank to deposit it. Then there's a wait until the check clears.

''With direct deposit, the money has to be made available to you at the start of business on the day your benefit is payable,'' Herd said.

Direct deposit could be especially important to baby boomers, who say they want to travel a lot in retirement.

''With direct deposit, there's not problem if you're not home,'' Herd said. ''The money goes directly to your account.''

And, he pointed out, there's less chance of theft because there's no check to steal from a mailbox.

The Treasury's Hammond said people who receive Social Security checks or other benefit checks and are interested in learning more about direct deposit or in signing up for the service can find information at www.godirect.org.

The government also has set up toll-free numbers for beneficiaries to call to sign up for direct deposit. English speakers should call 800-333-1795, while Spanish speakers should call 800-333-1792.



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